StretchDollar, a well being advantages firm, has raised $6 million in funding to help small companies, the corporate introduced Tuesday.
San Francisco-based StretchDollar presents an ICHRA-focused mannequin (Particular person Protection Well being Reimbursement Preparations), which permits employers to supply their workers pre-tax funding to allow them to purchase particular person insurance policy. By way of StretchDollar’s platform, small companies can fill in fundamental information and choose a month-to-month pre-tax allowance. They will then invite their workers to affix the platform, and the pre-tax {dollars} are despatched month-to-month from the enterprise’ checking account to the workers.
“A conventional small group well being plan usually takes 100+ hours to arrange and requires minimal worker participation of fifty% or extra together with different strict necessities,” mentioned Marshall Darr, co-founder and CEO of StretchDollar, in an e-mail. “This course of additionally entails a enterprise proprietor successfully deciding which hospitals their workers can use, which suppliers they’ll see, and even what medicines the workers are going to have entry to. It’s lots to ask of a small enterprise proprietor. We’ve constructed a platform designed to simplify the whole lot, whereas lastly giving workers selection.”
The seed funding was led by Fika Ventures and Oscar Well being and included participation from Precursor Ventures and Springbank. It follows a $1.8 million pre-seed spherical from final fall.
“Fika Ventures is thrilled to again StretchDollar’s mission to democratize healthcare entry for small companies via their progressive ICHRA platform that transforms a painful 100+ hour course of right into a 10-minute setup,” mentioned Tianxiang (TX) Zhuo, common companion with Fika Ventures, in an announcement.
With the funding, StretchDollar will broaden its self-service platform, in accordance with the announcement.
Within the U.S., there are 5 million companies with fewer than 10 workers, in accordance with Darr. In 2010, 60% of those companies offered well being advantages to their workers, however by 2023, that determine dropped to 40%. This lower isn’t as a result of small companies don’t wish to present well being advantages, however as a result of managing well being advantages is sophisticated, Darr mentioned.
In response, the ICHRA house has been choosing up steam. In response to the HRA Council, ICHRA adoption elevated by 29% between 2023 and 2024. And StretchDollar isn’t the one firm supporting this development: different firms that assist employers administer ICHRAs embrace Gravie and Take Command. Oscar Well being has additionally been a serious advocate for ICHRAs.
“The ICHRA house has acquired numerous consideration recently due largely to a considerable improvement we’re seeing out there,” Darr mentioned. “Medical health insurance carriers are pulling out of the small group market leaving small companies with few choices. Humana and Cigna have all eliminated their small group providing completely. Different carriers, like UnitedHealth and Aetna, have scaled them again considerably. As an alternative, firms like Oscar and Centene, are pivoting to {the marketplace} and increasing their particular person medical insurance choices.”
Darr added that trying forward, StretchDollar hopes to tackle different areas within the well being advantages house that small companies have historically struggled to supply, resembling imaginative and prescient, dental, retirement, life and incapacity advantages.
Photograph: sorbetto, Getty Photographs